Thurrock councillor in charge of finance “responds” to Financial Times investigation

IN an indirect response to day’s national news revelations about its investment strategy, Thurrock Council has issued a statement about its ‘secure’ financial position.

The council has not responded to requests for information about its financial position from local media, though a limited response has been given to national news organisations.

As told in our story earlier today, the Financial Times and the the Bureau of Investigative Journalism have produced a deeply researched and probing investigation into the council’s borrowing strategy – which has seen it accumulate a debt of more than £1 billion.

Financial experts have questioned the probity of the council’s strategy and even the man making the decisions within the authority – finance director Sean Clark – has admitted he has questioned himself if he is doing the right thing.

The council has borrowing huge amounts of money to enable it to make investments to increase its finances. Much of the money has been invested in green technologies – including solar farms.

That strategy has come in for some serious questioning – as has the council’s relationship with the firm that brokered its investment deals and made millions for its boss.

Nevertheless the leading councillor for finance, in today’s ‘coronavirus update’. Cllr Shane Hebb, says the council’s choice of investment is a sound one and has put it in a great position while other councils are struggling in the wake of the coronavirus pandemic and its impact.

Cllr Hebb says: “Economically, there will be difficult days ahead. That has been the case before, and we must again, rise to that challenge.

“At present, Thurrock Council can continue to offer the services we depend on, despite the COVID-19 economic downturn.

“Although changes will be necessary to ensure sustainable services, our strong financial position means we can reform services at a considerate pace, without the need to instigate immediate, yet damaging and long-lasting service cuts.

“Residents may already suspect that change is coming, and they are right. The government has helped Thurrock during this crisis in unprecedented ways, but reduced income from taxation and businesses, and restrictions on spending caused by social distancing restrictions – for example at our theatre – has led to income shortfalls.

“Importantly, we are in a better position than most councils are. Since 2016 we have increased reserves by 40% and our investment approach, which was agreed by all councillors back in 2017, has paid for services beyond what a council normally does.

“Despite the economic downturn, our investments continue to pay out fully during this crisis as we expected they would – our belief in investing in energy (a commodity needed in or out of crisis) rather than purchasing high-streets, which have seen unparalleled economic impacts during this crisis, has yielded.

“It is a cliché – but we said we would fix the roof whilst it is shining; and we did. The rain is above us now – but we have a decent roof, and therefore time, to do what we need to in order to safeguard the borough in a tough economy.

“That means the council needs to become leaner and smarter. Our “Fewer Buildings, but Better Services” approach has proved that we could make services more affordable but still provide great services. We need to do more of this to keep services affordable, while still building services for the future.

“As a Cabinet, we are clear – we want to make sure our vulnerable adults and children are protected in the best way; we want to retain as many of our Clean-It, Cut-It, Fill-It campaign achievements, and we want to continue the fight against anti-social behaviour.

“Thurrock is not a council threatening bankruptcy – but like other councils, Thurrock may well have to use some of its reserves in the short-term and then re-build our reserves back to their current levels over the next few years. Unlike other councils, this gives us time to adjust what and how services are run in a considerate way.”

In an addition to the newsletter it sent out at midday the council adds the following:

Secure financial position for Thurrock Council

Thanks to prudential financial planning and an innovative investment strategy, Thurrock Council is far better placed to weather the coronavirus financial storm than many other local authorities.

While councils across England are talking about warning the government that they cannot meet their financial obligations – what is called a Section 114 Notice – Thurrock Council is not in that position.

Thurrock Council has received £10 million government funding to help pay for additional financial pressures caused by the pandemic but was in a strong financial position before the current health crisis.

The council has spent the last few years increasing its reserves by 40%, money which is held to deal with unforeseen situations of emergencies, and currently has more than £11 million in reserves.

The council also has an investment strategy which means that it has significant income from sources not affected by the pandemic, mostly renewable energy providers.